Documents don't change Withdrawal Agreement

Essentially, they both provide more legal comfort for London that the EU cannot keep the UK in the backstop indefinitely, and tighten up the pressure on both sides to agree the future relationship quickly so that it can supersede the backstop.

They also re-commit both sides acting in "good faith" and to use "best endeavours", again two key phrases that already appear in the Withdrawal Agreement, in reaching that future trade deal.

Following a close reading of the documents, it appears that they don’t change the Withdrawal Agreement or the backstop per se, and that if the UK wants to exit the backstop, it will still have to go through the same arbitration machinery that is already in the Withdrawal Agreement.

This is a new legally binding mechanism, sometimes known as a Joint Interpretative Instrument, which Michel Barnier formally offered on Friday and which appears to have helped unblock the negotiations.

It is a four-page document that re-affirms some commitments already made, i.e. those in the Tusk-Juncker letters of 14 January, on the issue of good faith, the desire to secure a future trade deal quickly, and the question of "alternative arrangements" to the backstop.

The text begins by saying that both sides reiterate their wish to establish a future partnership that is "as close and strong as possible".

There is a commitment to embark on preparations immediately after the Withdrawal Agreement is signed so that negotiations on that future relationship can start once exit has happened at the end of March (if the deal is ratified).

No surprises here.

The text then recalls the Tusk-Juncker letters from January to the effect that the parties "do not wish the backstop … to become applicable, that were it to do so it would represent a suboptimal trading arrangement for both sides, and that both parties are therefore determined to replace the backstop …by a subsequent
agreement that would ensure, on a permanent footing, the absence of a hard border on the island of Ireland".

Again, this is reaffirming what’s in the Tusk-Juncker letters.

Both sides underline that the protocol will be subject to regular reviews in order to consider whether it is still necessary or could cease in whole or in part.

The text then gets to the issue of good faith and best endeavours.

Both sides recall that after the transition period, any dispute concerning compliance with the good faith part of the treaty (Article 5), the best endeavours part of the Protocol (Article 2(1)), and the review clause (Article 20 of the Protocol), will be subject to the dispute settlement mechanism that is already in the Withdrawal Agreement (ie, Articles 167 to 181).

The text says that the Joint Instrument provides "a clear and unambiguous statement by both parties … of what they agreed in of the Withdrawal Agreement, including the Protocol on Ireland/Northern Ireland".

It is a "document of reference that will have to be made use of if any issue arises in the implementation of the Withdrawal Agreement. To this effect, it has legal force and a binding character".

This, obviously, spells out the legal nature of the Joint Instrument.

The text, essentially, then repeats the good faith obligations to have the backstop replaced by something better.

It refers to the preamble of the protocol in which it is stated that both sides’ intend to "replace the backstop … by a subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing".

The text then refers to Article 2(1) of the protocol, which contains the obligation for both sides to "use their best endeavours to conclude, by 31 December 2020, an agreement which supersedes this protocol in whole or in part".

Both sides now believe, for example, "a systematic refusal to take into consideration adverse proposals or interests" would be incompatible with the "best endeavours" and "good faith" obligations of the protocol (Article 2.1) and the WA (Article 5). So, both sides will start negotiations on a subsequent agreement as soon as possible after exit.

Those negotiations should be conducted "as a matter of priority", and efforts redoubled should the negotiations not be concluded within one year of exit (ie, April 2020).

Again, both sides point to paragraphs 141 to 143 of the Political Delcaration, which commit the parties to start preparations for those negotiations as soon as the Withdrawal Agreement is signed.

This includes setting up their respective negotiating structures and discussing logistical arrangements.

Both sides are "therefore committed to working speedily on a subsequent agreement that establishes by 31 December 2020 alternative arrangements, so that the backstop will not need to be triggered".

The EU and UK further agree to establish a negotiating track for replacing the customs and regulatory alignment in goods elements of the protocol with alternative arrangements, once ratification has happened.

This part of the Joint Instrument gives more visibility to the technological solution to the Irish border question. Both Dublin and Brussels have voiced scepticism in the past that it can solve the issue; however, they are committed to exploring such options.

It also complements the UK government’s promise to look at technology, customs practices and other ways of dealing with the Irish border.

The text says: "By virtue of being embedded in the overall negotiation structure, the negotiating track on alternative arrangements will be able to take account of progress made in the wider negotiations on the future relationship, in particular on goods regulations and customs."

That means, in essence, that the alternative arrangements quest isn’t being done in isolation. But clearly, if those alternative arrangements are going to work as part of the overall trade deal, it will required fairly close – perhaps high – alignment between the UK and EU customs and regulatory spheres.

The statement refers to paragraph 147 of the political declaration, which provides for a "high level conference" to be convened at least every six months from exit date to take stock of progress and agree, as far as possible, actions to move forward.

In order to ensure a subsequent agreement enters into force by the end of the transition, both sides consider it "important" to review the progress on alternative arrangements at every high level conference, alongside wider progress on the future relationship.

"In light of those considerations" the UK can request an extension of the transition to allow further time for the future relationship and the subsequent agreement to be finalised.

This gives London some cover to extend the transition, if it is being done in order to pursue those alternative arrangements.

Both sides can convene an extraordinary high-level conference at any moment, and at short notice, in order to deal with an "substantive obstacles" that could "delay or risk progress".

A subsequent agreement replacing customs and regulatory alignment (goods) could stand alone or form part of a wider agreement or agreements on the future relationship, depending on the progress of the wider negotiations.

If the agreement needs to "stand alone" due to delays in the wider negotiations, both sides will aim to establish this agreement "very rapidly" after the end of the transition "in full respect of the parties’ respective legal orders".

Again, this has the potential to replace the backstop with a separate agreement if the overall trade negotiations are delayed. It is not clear, however, how likely alternative arrangements can deliver this stand alone arrangement, given that such comprehensive technologies – in the eyes of the European Commission – do not yet exist.

Both sides agree that once negotiations on alternative arrangements have been completed to the satisfaction of both parties, the outcome will be transposed into a subsequent agreement.

This will be applied as soon as possible after its signature and can be provisionally applied if necessary in line with the applicable legal frameworks and existing practice.

The Joint Instrument then deals with the issues of compliance and unilateral suspension, a key and sensitive part of the Strasbourg deal.

Both sides agree that it would be inconsistent with their good faith obligations under Article 5 of the treaty, and best endeavours obligation under Article 2(1) of the protocol for either party to try to apply the protocol indefinitely.

If either side considers the other party is acting in this way once the backstop takes effect, it can opt for the dispute settlement mechanism that is already in the Withdrawal Agreement (Articles 167 to 181).

If there is a dispute on "good faith" and "best endeavours", both sides will enter into consultation within the Joint Committee, endeavouring to resolve the dispute in a "timely manner" and aiming to reach a "mutually agreed solution".

Both sides will have to provide a "written reasoned justification of its respective position and will respond in writing to the other".

A ruling by the arbitration panel that one side is acting to apply the protocol indefinitely "would be binding".

"Persistent failure" by a party to comply, and thus persistent failure to return to compliance with its obligations, "may result in temporary remedies".

"Ultimately, the aggrieved party would have the right to enact a unilateral, proportionate suspension of its obligations under the Withdrawal Agreement."

The suspension may last until the offending party has taken the necessary measures to comply with the ruling.

This, then, is the UK’s main avenue to exiting the backstop, i.e. through a "suspension". But the bar is set particularly high for this. The EU would have to have been found to have tried to keep the UK in the backstop indefinitely in bad faith, and to have then repeatedly disregarded the arbitration panel’s binding ruling on the issue.

The Joint Instrument then deals with the specifics of how the backstop will impact Northern Ireland.

The protocol does not supersede the Good Friday Agreement, nor alter north-south cooperation in areas where the Executive and the Irish Government have competence.

This is spelled out already in the Withdrawal Agreement and in the Tusk-Juncker letters.

The Joint Instrument reaffirms that under Article 15(5) of the protocol, any new EU law that falls within the scope of the Protocol, but doesn’t amend or replace existing rules, will require the UK’s agreement in the Joint Committee.

Both sides confirm that the protocol doesn’t prevent the UK from bringing in the Northern Ireland Executive if it sees fit.

Again, this was spelled out in the Tusk-Juncker letters on 14 January.

After the Withdrawal Agreement was concluded in November last year, the EU and UK agreed a Joint Political Declaration on how the future relationship should look like.

Unlike the treaty, the Political Declaration was not legally binding, so it was a more flexible document.

This was important in terms of the vexed question of the Irish border, as the backstop is there "unless and until" it is superseded by that future relationship.

When Theresa May began her quest for changes to the backstop, the EU’s preference was that those changes were primarily in the Political Declaration.

Last night, both sides agreed a two-page statement that "supplements" that Political Declaration.

Like the Political Declaration, the Joint Statement is aspirational in character, because neither side can second guess how those trade negotiations will end up.

It also draws heavily on sentiment already expressed in both the treaty, and in the new Joint Instrument agreed in Strasbourg.

It first sets out that both the EU and UK have agreed a number of measures "to enhance and expedite the process of negotiating and bringing into force their future relationship".

Both sides have a "shared and solemn regard" for the vision for the future relationship in the Political Declaration.

This new text repeats the "the clear and important link between the Withdrawal Agreement and the Political Declaration," which are "part of the same negotiated package".

This provides more comfort for London, as it has always been unhappy that the backstop has legally binding character, while the future trade deal remains in the realm of the aspirational.

The text then repeats the "best endeavours" and "good faith" promises of the Withdrawal Agreement to "negotiate expeditiously the agreements governing their future relationship".

There’s a reminder of the link between the Withdrawal Agreement and Political Declaration in that both were published side by side in the EU’s Official Journal.

The new Joint Statement once again says both sides have the same ambition to have the future relationship in place by the end of the transition.

Again, there is a repeat of the Joint Instrument promise to start the ball rolling as soon as the Withdrawal Agreement is ratified.

Both sides agree that negotiations on the various strands of the future relationship will proceed in parallel.

Again, repeating what is in the Tusk-Juncker letters of January, the statement says that if it takes member states some time to ratifiy the future relationship, then parts of that relationship can be applied "provisionally".

In order to provide "a sound foundation" for the talks, both sides will quickly identify problem areas and areas where technical and legal issues need to be addressed ahead of time.

Both sides will also draw up a full schedule for the negotiations, "taking into account various internal processes, including the European Parliament elections and the appointment of a new commission".

This is to reassure the UK that the future relationship negotiations will not be held up by the European Parliament elections or the new European Commission finding its feet.

The statement goes on to say that the EU "notes" the UK’s intention to ensure that its social, employment and environmental standards "do not regress from those in place at the end of the transition period".

This relates to the promise by Theresa May to Labour that the House of Commons can agree to keep up with EU standards in these areas.

The statement then reiterates the promise of a separate negotiating track that aims to agree "alternative arrangements" to the backstop by the end of December 2020.

Again, this is reaffirming what is in the new Joint Instrument. The statement is a reminder that that negotiating track will consider the use of "all existing and emerging facilitative arrangements and technologies" to replace the backstop if possible.

However, the assessment of how that process is going will have to include an evalutation of how they work given "the unique circumstances of Northern Ireland".

As part of this process both sides commit to consulting with private sector experts, businesses, trade unions, the institutions established under the Good Friday Agreement, and the "appropriate involvement of parliaments".

This again reflects Theresa May’s announcement last week on calling in a range of stakeholders on issues relating to borders, customs, technology etc.

This is the third, and probably most contentious, element of what was agreed in Strasbourg last night.

The idea of the UK issuing its own Unilateral Declaration has been in the frame for around two weeks, after it was initially proposed by the Attorney General Geoffrey Cox.

The idea is to give the UK stronger legal ground on which to take a case against the EU if London feels it is acting in bad faith or is dragging its feet in concluding a future relationship deal to supersede the backstop.

It’s understood that when this was first raised in the negotiations, the EU’s chief negotiator Michel Barnier regarded it as a cumbersome idea, what he called a usine à gaz (essentially a complicated contraption that wouldn’t work).

However, the European Commission side agreed to this new element late last night. According to London sources, the idea prompted strong push back from Dublin, although this has been vigorously denied by Irish officials.

The idea, however, is an intriguing manoeuvre, which takes a bit of explaining.

First of all, if the UK were to declare unilaterally that it had a certain legal view of the backstop, the EU might normally be expected to issue a counter declaration, with the prospect then of a "declaration war" between both sides.

However, the EU has not done this. That means it has tacitly allowed the UK manoeuvre to go ahead as part of the trio of papers published last night.

That does not mean the EU has agreed with the content of the Unilateral Declaration; it simply means it is content for the UK to use the declaration in a potential future legal challenge over the backstop.

Indeed, in such a challenge, the declaration would have "legal status", whereas if the EU had issued a counter declaration it would have been "legally dead", according to UK sources.

What then is in the Unilateral Declaration?

Again, much of it repeats the aspirational language of the Joint Statement supplementing the Political Declaration, and the legally binding language of the Joint Instrument.

It states that the UK "reiterates its wish to establish a future partnership that is as close and strong as possible … and underlines its commitment to embark on preparations immediately after the signature of the Withdrawal Agreement to ensure that negotiations on the future relationship can start as soon as possible after withdrawal".

Nothing new there that is not in the other documents.

The declaration continues: "In that light, the United Kingdom notes, subject to Article 1(4) of the Protocol on Ireland/Northern Ireland, that the objective of the Withdrawal Agreement is not to establish a permanent relationship between the Union and the United Kingdom, and that the provisions of the Protocol are therefore intended to apply only temporarily, taking into account the commitments of the Parties set out in Article 2(1)."

This has long been the UK’s argument: Article 50 is the divorce treaty, and is not intended to be the permanent basis of the future relationship. So here, London is re-emphasising its view that the backstop cannot – even according to the EU’s own rules – be permanent.

The Unilateral Declaration continues: "The United Kingdom wishes to record its understanding of the effect of this provision if, contrary to the intentions of the parties, it is not possible for them to conclude an agreement which supersedes the Protocol in whole or in part due to a breach of Article 5 of the Withdrawal Agreement by the Union."

Again, this is the central UK argument: that if the parties can’t conclude the free trade talks, or if the EU acts in bad faith, then the UK could be trapped in the backstop (Article 5 is the "good faith" obligation).

As such, the UK "would not consider [the backstop] … to be temporary in these circumstances, as in its view the Protocol would then constitute a permanent relationship between the Union and the United Kingdom".

The declaration then makes the legal argument that this scenario would be in breach of the Withdrawal Agreement itself, notably Article 1(4), which "makes clear this is not the parties’ intention".

Therefore, the UK was – through this Unilateral Declaration – recording the fact that the UK would be free to "[instigate] measures that could ultimately lead to disapplication of obligations under the protocol".

In other words, the UK would be free to send a case to arbitration, under the Joint Committee architecture and Article 20 of the protocol.

However, the fruits of this Unilateral Declaration are essentially limited to the arbitration that the UK can already seek via the Withdrawal Agreement.

That arbitration allows the UK to seek a partial suspension of the backstop, but only if the EU has been found by the arbitration panel to be repeatedly acting in bad faith, for example trying to keep the UK in the backstop indefinitely, or not complying with the exigencies of getting a replacement agreement or alternative arrangements up and running.

Even then the panel will have to have concluded that the EU is deliberately and repeatedly not complying with the panel’s binding ruling on the matter.

The benefit for the UK is that the Unilateral Declaration can be taken into account by the panel, especially since – as we have seen – the EU tacitly accepted it.

But the bar is still high for the EU to have been found repeatedly in bad faith.

One highly sensitive issue for the UK is the link that French President Emmanuel Macron made back in the autumn between resolving the backstop issue and the fisheries question.

UK officials say if that was attempted in anger it could constitute bad faith behaviour by the EU.

It’s also worth noting that any suspension of the backstop is "under the proviso that the UK will uphold its obligations under the [Good Friday] 1998 Agreement in all its dimensions and under all circumstances and to avoid a hard border on the island of Ireland".

That at least provides some balancing for the Irish Government that, even if the Unilateral Declaration is deployed in an arbitration scenario, the outcomes that the backstop are designed to deliver – no hard border – will still be required of the UK.

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